Disney boss Bob Iger: We've made too much content for Disney+, traditional linear TV business 'is broken'.

by Thinus Ferreira

Disney CEO Bob Iger on Thursday said that The Walt Disney Company made too many shows for its Disney+ video streaming service diluting the impact of its content and that the Mouse House would consider selling off its linear Disney TV channels which are no longer considered part of its "core" business since that part of the business is broken.

Speaking to CNBC during a sit-down interview on the sidelines of an Allen & Co. session in Sun Valley, Idaho in the United States as part of the larger Sun Valley Conference, Iger on Thursday admitted that Disney over-extended its creative forces in ramping up content for Disney+ causing the quality of its film output from its various studios to suffer.

Disney has seen several of its films flop at the box office in the past few months, from Marvel's Ant-Man and the Wasp: Quantumania and the live-action remake of The Little Mermaid, to Elemental and the disappointing opening of Indiana Jones and the Dial of Destiny.

Bob Iger noted that "there have been some disappointments. We would have liked some of our more recent releases to perform better. In our zeal to basically grow our content significantly to serve our streaming offerings, we ended up taxing our people in terms of their time and their focus way beyond where they had been".

"Marvel is a great example of that. They had not been in the TV business in any significant level. Not only did they increase their movie output but they ended up making a number of television series, and frankly it diluted focus and intention."

"There were three Pixar releases that went direct to streaming, mostly because of Covid," Iger said, referring to Soul, Luca and Turning Red. "I think it may have created an expectation under the audience that they're eventually going to be on streaming, and probably quickly, and there wasn't an urgency."

"You have to agree that there were some creative misses as well," Iger said.

Disney: Linear TV channels broken

Bob Iger also spoke about the ongoing deterioration and unravelling of linear broadcast television and the traditional pay-TV channel business which he calls "broken".

Disney owns and runs TV channels ranging from the ABC broadcast network in the United States, to pay-TV channels like The Disney Channel, National Geographic and ESPN distributed globally to and carried by pay-TV operators in South Africa like MultiChoice's DStv and StarTimes Media SA's StarSat.

"The disruption of the traditional television business is most notable," Iger said when asked about the big challenges facing Disney. "The disruption of that business has happened to a greater extent than what even I was aware".

Iger said that Disney will look at and consider potentially selling something like ABC, as well as its Disney pay-TV channels "which may no longer be core" to the overall business, but will keep ESPN and look for strategic partners when it transitions ESPN to streaming.

About ESPN he said it's "not necessarily about spinning ESPN off, but about looking for strategic partners that could either help us with distribution or content but we want to stay in the sports business."

"There is an inevitability in taking ESPN direct-to-consumer [streaming]; we haven't said when but we do know that it will happen."

About ABC, National Geographic and the other Disney channels, Bob Iger said "We're going to be expansive".

"We have to be objective and open-minded about the future of those businesses."

"They may not be core to Disney. There's clearly creativity and content that they create that is core to Disney but the distribution model, the business model that forms the underpinning of that business  - to deliver great profits over the years - is definitely broken. And we have to call it like it is - and that's part of the transformative work we're doing."

"One of the things that I discovered when I came back is that one of the disruptive forces that have been preying on that business for a while is greater than I thought. It's eye-opening. There is a reality to it that we have to come to grips with and we have to come to grips with that now."

Disney+ loses 4 million subscribers, will cut back on streamer's volume of content.

by Thinus Ferreira

Disney on Wednesday night in its latest quarterly earnings report announced that its Disney+ had lost subscribers again for the second consecutive quarter and will cut back on the volume of content it makes for its video streaming service.

Disney+ lost 4 million subscribers globally during the first three months of 2023, falling from 161.8 million to 157.8 million subscribers, after ending 2022 with the streamer's first decline in user numbers. 

While Disney+ added almost one million international subscribers outside of India, in India it lost 4.6 million Disney+ Hotstar subscribers where it lost the rights to Indian Premier League (IPL) cricket matches, and it lost another 300 000 subscribers in the United States and Canada.

Christine McCarthy, Disney chief financial officer, on the quarterly earnings call, said that Disney has decided to cut back on the volume of content it will be producing for Disney+ going forward. 

She said that Disney is "in the process of reviewing the content on our direct-to-consumer (DTC) services to align with the strategic changes in our approach to content curation". 

Disney "will be removing certain content from our streaming platforms" as a result. "Going forward we intend to produce lower volumes of content in alignment with this strategic shift," she said.

Disney also made less money from its international pay-TV channels business during the quarter. The revenue from its international TV channels for the quarter dropped 18% to $1.1 billion, while operating income decreased by 65% to $85 million. 

Bob Iger, Disney CEO, said that the company plans to eventually move the ESPN TV channels to streaming and that pricing still has to be figured out, with the company's plans for ESPN which have not changed.

Disney boss Bob Iger: Fewer show and films but higher quality, will licence shows to broadcasters like MultiChoice, M-Net and e.tv again.

by Thinus Ferreira

Revealing what the Mouse House has learnt from the video streaming wars, recently-returned Disney boss Bob Iger says The Walt Disney Company is going to reduce the amount of content it produces when it comes to TV shows and films - including for Disney+ - but that what is being made will be of higher quality and that Disney is open to licensing premium content to broadcasters again.

Bob Iger also hinted that Disney+, in the chase to add subscribers and gain scale, has been priced too cheap, hinting that price corrections in the form of price hikes are coming down the pipeline.

He said that Disney will very likely once again start licensing certain Disney content to broadcasters.

This will be good news to South African broadcasters and pay-TV companies like e.tv as well as MultiChoice and M-Net (DStv 101) that could no longer acquire Disney content after Disney decided to keep back its own content to build out its Disney+ video streaming service which it also launched in South Africa in 2022.

On Thursday Bob Iger spoke at the 2023 Morgan Stanley Technology, Media and Telecom Conference in San Francisco and according to American media reports explained that Disney is drastically slashing costs and scaling back on the volume of TV shows and films, saying Disney is now rather refocusing on quality content instead.

"It comes in the form of reducing the expense per content, whether it’s a TV series or a film, where costs have just skyrocketed in a huge way and not a supportable way in my opinion," he told delegates.

"As we look to reduce the content that we're creating for our own platforms, there probably are opportunities to license to third parties. For a while that was verboten or something we couldn’t possibly do, because we were so favouring our own streaming platforms."

"But if we get to a point where we need less content for those platforms, and we still have the capability of producing that content, why not use it to grow revenue? And that’s what we would likely do."

Bob Iger said "I think it's already clear to us that the exclusivity that we thought would be so valuable in growing Disney+ subs, while it has some value, wasn't as valuable as we thought".

"Content can actually exist on the traditional platform and on the streaming platform quite well without doing damage to either one, because actually a very, very audience is consuming on those platforms."

More picky about projects

About films and franchises like the Marvel universe and Star Wars, Bob Iger said "What we have to look at at Marvel is not necessarily the volume of Marvel storytelling, but how many times we go back to the well on certain characters".

"Sequels typically work well for us, but do you need a third or a fourth, for instance? Or is it time to turn to other characters? There's nothing in any way inherently off in terms of the Marvel brand. I think we just have to look at what characters and stories we are mining."

"If you look at the trajectory of Marvel over the next five years, you’ll see a lot of newness. Now, we're going to turn back to the Avengers franchise, but with a whole set of different Avengers, as an example."

"With Star Wars we made three what we called saga films, which is obviously the successors to George Lucas' first six."

"They did very well at the box office - tremendously well as a matter of fact. We've made two so-called stand-alones in Rogue One and Solo.

"Rogue One did quite well, Solo was a little disappointing to us. It gave us pause just to think maybe the cadence was a little too aggressive. And so we decided to pull back a bit. We still are developing Star Wars films. We're going to make sure that when we make one, that it's the right one, so we are being very careful there."

Bob Iger says quality content is a differentiator in the video streaming wars.

"There's so much consumer choice right now, and it comes back to, 'What is differentiated?' That's one thing obviously we have talked about, is those brands: Star Wars, Marvel and Disney and Pixar, for instance. But quality is also a differentiator."

"I think HBO proved that well in their halcyon days when high-quality programming made a big difference, and not volume."

"Because the streaming platforms require so much volume, one has to question whether that's the right direction to go, or if you can be more curated, more - I used the word 'judicious' a few times - but I guess, more picky about what you're making, and to concentrate on quality and not volume."

Bob Iger said he "generally bullish on streaming as a great consumer proposition, as a really robust platform to deliver high-quality content" and that "eventually, I think everything will migrate to streaming,” including ESPN as a direct-to-consumer offering".

"Now it's about getting our content pipeline right, making sure that we're making the right decisions and making sure that we’re making the right number of decisions in terms of how much we're making."

"Then it's really being mindful of a world that is not getting any less complicated, and in fact that technology only is going to disrupt more, and making sure that we're positioning those great brands and this great content-generation business in the right way to deliver the kind of value that shareholders need long term."

Disney+ too cheap

Bob Iger said at the conference that in the chase to sign up Disney+ subscribers, the streamer has probably been priced too cheap and will be adjusting the pricing.

"In our zeal to grow global subs, I think we were off in terms of our pricing strategy, and we're now starting to learn more about it and to adjust accordingly."

SHOCKER. Bob Chapek fired after bad results, Bob Iger back as Disney CEO with 'a bit of amazement' in shocking shakeup.

by Thinus Ferreira

In a shocking move, Bob Chapek is out as The Walt Disney Company CEO, with former CEO Bob Iger returning to replace him after Disney's bad fourth quarter results with losses at its Disney+ video streaming service.

Bob Iger exited as Disney CEO in February 2020 after 15 years and remained Disney chairperson until the end of 2021, with the unpopular and inexperienced Bob Chapek taking over who fired top executives, fought with A-list Hollywood talent, embarrassed Disney with shocking statements and made disastrous management moves that even led to staffer walkouts.

In a stunning move by Disney, Bob Iger is now suddenly back as Disney CEO for another two years, saying in an email to Disney staffers on Sunday night that "I am deeply honoured to be asked to again lead this remarkable team, with a clear mission focused on creative excellence to inspire generations through unrivaled, bold storytelling".

The Disney board, unanimously, following distrust from the industry, increasing revolt from Disney staffers, as well as rumours that Bob Chapek's days are numbered, in June this year voted to renew Bob Chapek's contract with a new 3-year contract that started on July 2022.

The Disney board in a bizarre statement then said that "Bob Chapek is the right leader at the right time for The Walt Disney Company, and the board has full confidence in him and his leadership team".

It's now clear that the Disney board lied, has decided enough is enough after another five months of Bob Chapek's bad leadership and that Bob Chapek had to go.

In a new Sunday night statement, the Disney board chairperson Susan Arnold, now suddenly said in a blunt and shocking statement "We thank Bob Chapek for his service to Disney over his long career, including navigating the company through the unprecedented challenges of the pandemic".

"The board has concluded that as Disney embarks on an increasingly complex period of industry transformation, Bob Iger is uniquely situated to lead the company through this pivotal period."

"Bob Iger has the deep respect of Disney's senior leadership team, most of whom he worked closely with until his departure as executive chairman 11 months ago, and he is greatly admired by Disney employees worldwide - all of which will allow for a seamless transition of leadership." 

Bob Iger in the statement says "I am extremely optimistic for the future of this great company and thrilled to be asked by the board to return as its CEO".

"Disney and its incomparable brands and franchises hold a special place in the hearts of so many people around the globe - most especially in the hearts of our employees, whose dedication to this company and its mission is an inspiration."

Here is Bob Iger's email sent to Disney's 190 000 staffers worldwide on Sunday night:

"Dear Fellow Employees and Cast Members,

It is with an incredible sense of gratitude and humility - and, I must admit, a bit of amazement - that I write to you this evening with the news that I am returning to The Walt Disney Company as Chief Executive Officer.

When I look at the creative success of our teams across our Studios, Disney General Entertainment, ESPN and International, the rapid growth of our streaming services, the phenomenal reimagining and rebound of our Parks, the continued great work of ABC News, and so many other achievements across our businesses, I am in awe of your accomplishments and I am excited to embark with you on many new endeavours.

I know this company has asked so much of you during the past three years, and these times certainly remain quite challenging, but as you have heard me say before, I am an optimist, and if I learned one thing from my years at Disney, it is that even in the face of uncertainty - perhaps especially in the face of uncertainty - our employees and Cast Members achieve the impossible.

You will be hearing more from me and your leaders tomorrow and in the weeks ahead. 

In the meantime, allow me to express my deep gratitude for all that you do. Disney holds a special place in the hearts of people around the globe thanks to you, and your dedication to this company and its mission to bring joy to people through great storytelling is an inspiration to me every single day.  

Bob Iger"